Lufthansa CEO targets service, savings in Germanwings crash wake

[LONDON] Deutsche Lufthansa AG is looking to rein in costs and regain a reputation for high-quality service as the airline recovers from the deadliest crash in its history.

Passenger-traffic figures for May will show continued gains when they're released this week, Chief Executive Officer Carsten Spohr told reporters Sunday in what he called his first official news conference since the March 24 Germanwings disaster that killed 150 people.

Investigators have blamed a rogue co-pilot.

"It was beyond the imagination when it happened and it still is," Mr Spohr said in Miami, where he's attending the International Air Transport Association's annual meeting.

"You can't stop an airline for days, not for hours - to be honest, not even for minutes - life had to go on, life has gone on and is going on. We are working on the challenges we have." While still reeling from the accident, Lufthansa is focused on "quality, efficiency and innovation," Mr Spohr said.

Even before the crash, the Cologne, Germany-based carrier struggled with fallout from labor disputes as well as pressure from low- cost rivals and Persian Gulf carriers' grab for traffic on long- haul routes.

The "bundling" of smaller Lufthansa discount operations into a new Eurowings brand will be complete by the fourth quarter, Mr Spohr said.

EUROWINGS' RIVALS

Lufthansa seeks to make the operation into Europe's third largest point-to-point carrier, even as the two biggest low-fare competitors, Ryanair Holdings Plc and EasyJet Plc, look at Germany for expansion. Ryanair wants to triple the number of jets it operates in the continent's largest economy to as many as 80 within five years.

Lufthansa hubs in Frankfurt, Munich, Zurich and Vienna are crucial to the company's long-term success, and still account for about 70 per cent of revenue, Spohr said.

A new Lufthansa business class product will be rolled out on its wide-body fleet by the end of this month, following on the heels of a first-class refit, and a new premium economy product will be in place by the third quarter, he said.

"Lufthansa has to regain its reputation for being the quality airline, the quality aviation group in this industry," he said. "We know that there is a lot to be done in Lufthansa to make this a leaner organisation, a fast organisation."

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